CHOOSING A RESERVATIONS REPRESENTATION COMPANY PART 2 – THE VENDOR EVALUATION PROCESS

1 June 2001
John Burns
No comments
Categories: Uncategorized

Part 1 of this article from the spring issue of Hospitality Upgrade identified several of the key issues related to selection – by a single hotel or by a hotel chain – of a reservations representation company. It identified the variety of reservations representation service options available and the timetable for the evaluation and implementation process. Part 1 also identified many of the prominent representation service vendors.

In Part 2 we will identify the steps in vendor evaluation, recommending a structure which will lead to a thoughtful, sufficiently detailed vendor selection process.

The initiation of the evaluation process can range in complexity from a call or e-mail to business development staff at these organizations to request proposals, to a considerably more intensive approach involving development, distribution and evaluation of a detailed Request for Proposal (RFP). Regardless of the degree of complexity selected, completion of several preparatory steps is wise:

  1. Catalog the services supplied by your current vendor
  2. Identify any shortcomings in the current vendor’s services
  3. Identify any altered needs that you anticipate emerging in the next several years
  4. Compile the statistics for the reservations delivered by your current vendor during the last calendar year and estimate the volumes for the next 2 years
  5. Identify the services needed and performance standards expected from your representation services vendor

Step 5 is essential. At its most basic, it is your “shopping list”. At the other end of the spectrum this list is the core of an RFP. Fleshed out with detailed questions, it provides a definitive description of your needs. Regardless of the degree of detail you determine to be appropriate, the document allows you to compare each proposal to your specific needs, as well as to compare the proposals.

KEY ISSUES TO QUERY

A wide variety of areas and issues should be examined in evaluating representation vendors. A simple requirements summary can run 5-10 pages, an RFP developed by a hotel chain can reach 50-75 pages or more. Regardless of the level of detail in which you chose to examine and evaluate the vendors who you are considering, the following topics, I believe, are basic to all vendor evaluations:

Vendor Organization

  • History / Structure
  • Key staff
  • Products / Services
  • Customer base
  • Financials
  • References

Reservation Services

  • Central reservation center (CRO) location(s) – North America and Worldwide – and countries/languages served
  • The CRO operator. The vendor or a third party?
  • CRO operating hours for the CRO
  • Guaranteed maximum abandon rate for calls to the CRO
  • Guaranteed maximum average speed to answer for calls to the CRO

Voice Reservation Services

  • Private Label Voice Reservation Processing
  • Generic Voice Reservation Processing
  • Overflow/after-hours voice reservation processing on a private label basis

GDS Reservation Processing

  • Participation at the Seamless Connectivity level in all major GDSs – Sabre, Galileo/Apollo, Amadeus and Worldspan
  • Percent of GDS reservations that are rejected and require manual processing
  • Average time between receipt and clearing of GDS rejected reservations
  • Switch company used for GDS connectivity
  • Systems in place for automated GDS data updating related to:
  1. Availability
  2. Rate updates
  3. New rates
  4. Property descriptions (HOD)

Internet Reservation Processing

  • Ability to offer immediate bookability on the vendors Web site(s)
  • Bookability on additional “onward distribution” Web sites as a result of selecting this vendor
  • Ability of Vendor’s reservation system to serve as the booking engine for your customers’ own Web site(s)

Reservation System Functions/Capabilities

  • Central Reservation System (CRS) inventory and rate control options include (with each applicable by rate, room and house):
  • Open
  • Close
  • Closed to arrivals
  • Minimum length of stay
  • Maximum length of stay
  • Inventory allocation
  • Group and wholesale
  • Any limitation on the number of rate categories or room types the property may list in the CRS
  • Types and extent of property descriptive information held in the CRS for viewing by CRO Reservation Agents. Data update process.
  • Opportunities available to display maps and graphics to reservation agents
  • Confirmation delivery method(s)

On-Property Reservation System Access

  • Reservation download, inventory management, report production and other functions available to authorized property staff.

PMS/CRS Interface

  • Brands/versions of property management systems for which one-way and two-way interfaces are currently available. Data transferred in the one- and two-way interfaces.

Implementation Process

  • Implementation process
  • Typical implementation timetable
  • Training that CRO reservation agents would receive concerning client’s hotel
  • Training client staff would receive in the use of vendor’s services and reservation processing technology

Data Base Maintenance

  • CRS data base maintenance activities that cannot be completed by client staff and must therefore by completed by vendor staff
  • Time commitments for completion of each of these CRS data base maintenance activities
  • Time commitments for completion of GDS data base maintenance activities?

On-Going Training

  • On-going training provided to CRO staff
  • Opportunity for presentations by client to CRO reservation agents

User Support

  • Day-to-day user support services available to the client’s on-property staff

Reports/Data Warehousing/Data Analysis

  • Reports available to your customers, including their frequency of production and delivery options
  • Reports available on a real-time basis, reflecting up-to-the-minute activity data
  • Supplementary data warehousing and data analysis facilities available either free of charge or at an additional fee
  • Guest history or guest recognition functions provided in CRS

Revenue Management Capabilities

  • Revenue management features of the CRS together with interfaces to stand-alone revenue management systems

Sales Program

  • Electronic marketing efforts conducted or offered in the Global Distribution Systems and the Internet on behalf of clients
  • Preferred rates or other preferential arrangements made available to clients for either GDS or Internet electronic marketing

Miscellaneous Functions

  • Deposit processing service
  • Travel agent commission processing service
  • Corporate/preferred/negotiated rate program administration
  • Brochure fulfillment service
  • Other functions or services

Fees

All fees, services using these categories:

  • Implementation fees
  • Annual/monthly fees
  • Transactional fees

Plus:

  • Other fees
  • Minimum revenue requirements
  • Formula for fee increases in subsequent
  • Contract length

This summary only begins to indicate the issues to be raised and evaluated within each subject area. Typically, several (sometimes many) more detailed questions would be added to every one of these topic areas. It is easy to see how these documents – be they requirements summaries or detailed RFPs – can quickly become lengthy.

Once the requirements document has been prepared, the next step is to classify individual services as essential, desirable or useful. This process serves two purposes. First, the absence of one or more items classified as essential would probably eliminate that vendor from further consideration. Second, once the time comes to compare vendors, you and your staff will be better equipped to weigh the appeal of the features a vendor offers against their importance to your operation.

Typically, several vendors are contacted. In due course replies, ranging from brief proposals to detailed RFP responses, are received. The next task is to examine those replies, to determine if they indicate the presence of the previously identified essential, desirable or useful functions or services. Then comes the fee comparison.

Reservations representation fee structures differ substantially from vendor to vendor. An “apples-to-apples” fee comparison is not easily achieved. In my experience, such a comparison is most accurately derived by taking a year’s reservation activity statistics and then, after dividing the fees into the categories of implementation fees, annual/monthly fees and transactional fees, calculating the total cost for processing of that year’s activity using each vendor’s proposed fees.

Evaluation of proposals from several vendors generally results in identification of one or two companies for further examination. Often this begins with review of the on-property CRS access – which, increasingly, is accomplished using the Internet. The reservations activity reports provided by each vendor should be examined and compared to those currently provided and those which, optimally, would be available. Test calls to the CROs and conversations with other clients of the vendors are worthwhile as well. Finally, where circumstances warrant and permit, a visit to the vendors’ call centers may be useful.

While rarely the primary element in the final decision, fees are always a key consideration in the vendor selection. Frequently the opportunity exists for negotiation of these fees.

Once a vendor has been selected, and an acceptable service and fee formula negotiated, the final step is review, and possibly revision, of the vendor’s service contract. Written as they are by the vendor, they will naturally favor them. Addition or revision of sections, to ensure adherence to agreed service levels, to document addition of custom services and to provide appropriate balance between the parties to the agreement, is the next and final step.

With completion and signing of the service agreement, the implementation process is ready to begin, culminating in successful activation of your property or chain as a reservations representation service client.